Private company Noveder of Rouyn-Noranda, Que., has signed a letter of intent to acquire the Nugget Pond gold property in northern Newfoundland.
Nugget Pond is owned by Toronto-based Bitech (ASE) and reserves are estimated to be 453,000 tonnes grading 12.79 grams gold per tonne. Noveder will receive a 30% interest by paying Bitech $400,000 by August, 1995, and by spending $4 million on development and pilot milling. It can earn an additional 70% interest by bringing the property into production at 300 tonnes per day.
Bitech will retain an 8% net smelter return (NSR) on the first 200,000 tonnes of ore mined and processed and a 2-8% NSR on the remaining ore mined and processed ore. The NSR will depend on the price of gold and the grade of the ore.
As part of its commitment, Noveder completed a 5-hole infill program in which five zones were intersected, between 94 and 172 metres below surface. The best overall intersection was 8.33 grams over 20.3 metres, including a 6.8-metre intercept that ran 13.92 grams and a 2-metre section averaging 28.43 grams.
Other overall intersections graded 6.21-8.02 grams over lengths of 9.6-14.7 metres.
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